Germany has called for a crack down on right wing militants and racists after a second night of scuffles between protesters and police outside a refugee shelter in the eastern German town of Heidenau.

Just one day after 31 police officers were hurt in violent protests against the asylum seekers, a Reuters photographer on Saturday night saw some 200 mostly drunk militants in Heidenau throwing fireworks and bottles at police.

Some shouted "Heil Hitler".

As Europe struggles with an influx of migrants fleeing war in countries such as Syria and Iraq, German politicians are worried about the financial and social effects on their country, the EU's biggest recipient of refugees.

Germany, which has relatively liberal asylum laws, expects the number of refugees to quadruple this year to 800,000, almost 1 percent of the population. Chancellor Angela Merkel says the issue is a bigger problem for Europe than Greece's debt crisis.

Interior Minster Thomas de Maiziere has described the situation as a big challenge and condemned attacks on refugees.

"At the same time as a we see a wave of people wanting to help, we have a rise in hate, insults and violence against asylum seekers. That is obscene and unworthy of our country," de Maiziere told Bild am Sonntag newspaper.

"Anyone who acts like that faces the full force of the law."

Justice Minister Heiko Maas responded to the Heidenau riot by saying there was zero tolerance for xenophobia or racism.

Many politicians have warned about a rise in hostility towards foreigners and, in the first half of the year alone, some 150 arson or other attacks were recorded on refugee shelters.

With some in Merkel's party wanting to curb benefits offered to asylum seekers and pushing for other EU states to take more of the burden, Merkel faces a delicate political balancing act.

Vice Chancellor Sigmar Gabriel, chairman of the Social Democrats who share power with Merkel's conservatives, on Sunday called for a tripling of the money municipalities get for accommodation, medical care and education for refugees.

Other politicians called for a speeding up of the processing of asylum applications, which currently takes about eight months on average. More than one third of asylum seekers in Germany are from southeastern European countries such as Albania and Serbia.